An Alliance with Finance: Big banks and Insurance Companies join the Green Recovery Alliance
Written by Sarah Casey, Portfolio Manager, Energy Council
On 14th April, the Green Recovery Alliance was formed by members of the European Parliament together with ministers, CEOs, NGOs and trade unions from across Europe. The Alliance’s core aim is to ensure that the fight against climate change is central to the economic strategies that European countries adopt in their recovery after the COVID-19 pandemic.
The Alliance positions the green transition as a force which will power a much-needed economic recovery and maintains that investments should be aimed at accelerating the transition to a climate-neutral economy.
Pascal Canfin, a French centrist MEP who chairs the European Parliament’s committee on environment and public health stated that the coronavirus ‘will not make climate change and nature degradation go away [and] we will not win the fight against COVID-19 without a sound economic response’.
Members of the alliance include leaders of large companies including Ikea, H&M, Lego, Microsoft, Neste. This is significant as large industrial users, through corporate PPAs, have the ability to significantly change the market and, arguably, can have an effect much more quickly than government policy can.
Last week it was announced that more than 50 European banks and insurance companies, including Santander, AXA, BNP Paribas and Allianz and asset owners and managers have also joined.
That two of the largest European insurance companies and three of the largest Spanish and French banks have joined the alliance demonstrates its significance. It shows that the European financial sector recognises the importance of aligning economic recovery after the COVID-19 pandemic with the energy transition.
The move also reinforces the commitment of the European Finance sector to the sustainability agenda.
‘The pandemic has made the sustainability agenda even more important’, Carlos Torres Vila, CEO, BBVA
‘The finance sector must help re-allocate capital, else there will be no new Green deal or Green Recovery’, Ana Botin, Executive Chairman, Santander
‘The Covid19 crisis highlights the importance of amplifying our environmental ambition and societal commitments to better prevent future risks’, Thomas Buberl, CEO, AXA
‘We have learned from past experience that well-structured programs are successful and we should make use of these, ensuring that support funds are invested sensibly to restart the economy in a sustainable way’, Oliver Bäte, CEO, Allianz SE
Whilst undoubtedly, as noted by Dr Faith Birol, the IEA Executive Director, ‘the energy industry that emerges from this crisis will be significantly different from the one that came before’, the finance sector too will emerge changed.
A statement from the alliance said that ‘Unlike the 2008 crisis, investors and banks now have a horizon to reinvest in the economy, in line with carbon neutrality by 2050: The Green Deal’ and the recent commitment of big banks and insurance companies is a step further for the European finance sector in placing sustainability at the forefront of their agenda.